"Despite record backlog and revenues, Cameron consistently missed earnings expectations last year. After the third quarter earnings miss in October, we made CAM one of our largest commitments, and we are currently one of the largest shareholders," JANA said in a yearend letter sent to investors and obtained by CNBC.com.

Cameron, whose business is to provide fluid control products and services to oil and gas companies, saw its stock price jump slightly on the news Friday from about $58 a share to more than $60. The stock has since fallen back to around $58 as of midday Friday.

JANA said in the investor letter that the company's troubles can be fixed: "We believe Cameron's problems are self-inflicted, temporary and remediable."

JANA praised several recent moves at Cameron, including the recent repurchase of more than $750 million of stock and the newly announced sale of a business unit to GE.

But the hedge fund firm said there was still more to do.

"We believe there remains still more portfolio pruning to be done and that asset sales, balance sheet capacity and future free cash flow provide considerable powder for even more share repurchases," the letter said.

"As 2014 progresses we forecast a recovery in margins, and the reduced expectations for 2014 set up the possibility of management beating the consensus rather than consistently missing. We look out and see the potential for a more focused, stronger Cameron with normalized earnings power north of $5.00 per share."

JANA said the stock should ultimately trade at a "premium multiple" to oil field services peers.